In a debate article, the Centre Party has proposed the introduction of a consumption tax to simplify the situation for businesses operating within the so-called sharing economy.
Business operations within the sharing economy are now growing very rapidly and are expected to continue to increase their sales during the next few years. This has been reported upon in PwC’s report, "Global Annual Review 2015". These business opportunities are expected to be utilised primarily by individuals between jobs, those having a number of types of jobs, students or newly arrived migrants; or individuals who, themselves, don’t need to utilize an asset at 100 percent might take them advantage of.
In order not to hinder this development, the Centre Party is now proposing that all taxes paid by a business operation be combined into a single net sales tax, which would be paid at the same time the client pays for the goods or services. In this manner, there is no requirement, according to the proposal, to separately account for or administer this tax. Companies wishing to expand and utilise the possibility to deduct costs and VAT would, then, simply convert their companies into sole proprietorships or limited liability companies.
The proposal is interesting as it evidences that there are politicians who think in an innovative manner based on new technical possibilities. Consumption taxes have recently been introduced on gaming in a number of our neighbour countries, Denmark and Great Britain, amongst others, in order to tax gaming taking place on platforms in countries with low tax rates. In Sweden, a government committee, the Gaming Committee, is undertaking a review to determine if equivalent taxation should be introduced in Sweden. The increasing retail trade via the web also impacts indirectly the question of an increased need for consumption tax. Internationally, many countries want to see a transition towards tax in the country of consumption, and a move from traditional profit taxation.
This proposal from the Centre Party is seen as a proposal of a new principle. No basic deductions, ceiling amounts or other details are addressed in the article.
During this year’s Almedalen, PwC will bring attention to these ”new” tax issues during a morning seminar to be held on Tuesday, 5 July which will address tax forms currently outside the sphere of corporate taxation. In addition, the Centre for Business and Policy Studies (SNS) will put a focus on taxes on businesses in the sharing economy at a seminar in Stockholm on 19 April when the Tax Agency and business community will discuss how these new companies are to be taxed.
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